Affinity Insight 2.0 for Retail
SAP Performance and Insight Optimization February 2012

Customer‘s Voice “ “ Affinity
Insight … allowed interrogation of our data across a number of stores and categories providing affinity insight, some interesting, some obvious, some counter intuitive and some potentially highly lucrative and attractive. Projected savings and benefits showed relatively short payback in a matter of months rather than years … Colin McLean - Chief Operating Officer, Scotmid Group © 2011 SAP AG. All rights reserved. Public 2

What if… …you had full
insight to buying behavior on market basket level? Effective Rationalized Optimized store promotions assortment layout Analyzing customer behavior on market basket level can improve business decisions in various areas © 2011 SAP AG. All rights reserved. Public 3

The Challenge How to analyze
sales on the level that matters most – the customer level? Only aggregated data available Lack of statistical functionality Performance problems due to huge data sets Most reporting environments irreversibly destroy valuable information by aggregating sales transactions to daily or weekly level © 2011 SAP AG. All rights reserved. Public 4

Solution Scope Affinity Analysis 2.0
is a tool for sales analysis on market basket level Ad-hoc calculation of many different market basket KPIs Maximum flexibility for analysis in product and store hierarchies Intuitive user interface High performance computations powered by SAP In-memory technology Affinity Insight 2.0 allows flexible computations on market basket level © 2011 SAP AG. All rights reserved. Public 5

Analysis Example 1 Electronics retailer
Interested in effects of a digital cameras promotion on sales of other products Affinity Insight might show: Every third customer who purchases a digital camera also buys a spare battery This was true in the past, independent of whether digital cameras were on promotion or not Conclusion A promotion on digital cameras will also increase battery sales by an amount that can be well estimated Discover the true financial impact of drag-along effects © 2011 SAP AG. All rights reserved. Public 6

Analysis Example 2 Drug store
chain Wants to define a new minimum assortment for all their stores Approach: Mainly driven by lists of “top seller” items Affinity Insight might show: Certain premium products don’t have a strong direct contribution to over-all sales and profit, but they are often bought together with other high-value items in very profitable market baskets Conclusion Reducing the assortment without taking into account the market basket view may put business with the most profitable customers at risk Understand better how certain products indirectly contribute to your sales across the whole assortment © 2011 SAP AG. All rights reserved. Public 7

Analysis Example 3 Do-it-yourself store
chain Considering a major change in store layouts Affinity Insight might show: Certain departments are represented together in the same market baskets more often than others The products in some departments tend to be purchased alone or in small baskets Conclusion This information may be used to allow customers shorter, more convenient ways through the store, or guide them on ways that improve drag-along sales Get indications on how shoppers move through your store © 2011 SAP AG. All rights reserved. Public 8

Affinity Insight 2.0 – Solution
Architecture SAP Business Objects Dashboards User-friendly front ends PIO Statistics Functionality Java web service and SQL algorithms SAP HANA SAP HANA In-memory data base filled with POS data SAP HANA brings a new level of speed and detail to your analyses © 2011 SAP AG. All rights reserved. Public 9

Advanced Analytics Portfolio Key Value
Zone Markdown Trial Affinity Insight Drivers Optimization Optimization Management Assortment Size Price Marketing Insight & … Optimization Optimization Optimization Rationalization Performance Forecasting & Monitoring Demand Model (location, seasonality, price, promotions…) Transaction Log Data Inventory Data Master Data Affinity Insight 2.0 is part of a broad portfolio of standardized and tailored advanced analytics solutions © 2011 SAP AG. All rights reserved. Public 10

Your Benefits Business-relevant information that
is not accessible with most reporting tools Computation of various metrics on market basket level Maximum flexibility to drill down in product and store hierarchies Real-time computations on huge data sets with SAP In-memory technology Extension to other analytics services on the same technical platform Discover new facts about your customers with Affinity Insight 2.0 ! © 2011 SAP AG. All rights reserved. Public 11

Thank You! Contact information: Dr.
Helmut Linde Head of Science and Technology EMEA SAP Performance and Insight Optimization Helmut.Linde@sap.com +49 160 908 222 41